Belt and Road

Source: Economist Intelligence Unit

Political Highlights

Djibouti is a unitary republic wherein the president is the head of state elected by universal suffrage and serves a five years term. President Ismaël Omar Guelleh has ruled the country since 1999 and was last re-elected in 2016 with 87% of the votes. Guelleh's party, the Union pour la majorité présidentielle (UMP), also widened its majority in parliament by winning 57 of the 65 seats in the legislative elections held in February 2018.

In the medium term, positioning Djibouti as a regional trading and logistics hub will be the government's primary objective. Neighbor Ethiopia, with a population of over 100 million people and a rapidly growing economy, has long been dependent on Djibouti for its global import and export needs. Ethiopia accounts for more than 80% of traffic through Djibouti's ports and supplies the country with drinking water and hydropower, which reduces Djibouti's reliance on imported oil. The economic links between the two countries have brought considerable investment including the Djibouti-Addis Ababa railway which was officially inaugurated in January 2018, shortening travel time for goods and passengers.

Economic Trend

* Forecast
Source: Economist Intelligence Unit

Djibouti’s economy is dependent on foreign financing, foreign direct investments, rents from foreign countries’ military bases, and port services, which capitalize on both the country’s strategic location at the southern entrance to the Red Sea and on being Ethiopia’s main external trade route. The country’s economic activity in recent years has remained buoyant, boosted by major public sector projects, in particular the railroad to Ethiopia, the construction of several new ports and a water pipeline from Ethiopia. However, despite the remarkable growth, poverty remains high with more than 23% of the population living in extreme poverty.
 

Hong Kong – Djibouti Trade

Source: Census and Statistics Department of Hong Kong

Total exports from Hong Kong to Djibouti increased by 301.4% from HK$15.4 million in 2016 to HK$61.9 million in 2017. The top three export categories to Djibouti were: (1) telecommunications and sound recording and reproducing apparatus and equipment (+386.3%), (2) office machines and automatic data processing machines (+4523.7%), and (3) professional, scientific and controlling instruments and apparatus (+5362.4%), which represented 67.3% of total exports to Djibouti.

Source: Census and Statistics Department of Hong Kong

HKECIC Underwriting Experience

The Hong Kong Export Credit Insurance Corporation (HKECIC) imposes no restriction on covering Djibouti buyers. In the past 12 months (from October 2017 to September 2018), there was no insured business on Djibouti.

Please click here to download the charts (PDF format).

Last update: 10 Oct 2018

Source: Economist Intelligence Unit

Political Highlights

Somalia was a British protectorate until 1960 and collapsed into anarchy following the overthrow of the military regime of President Siad Barre in 1991. Although an internationally-backed government was established in 2012, the country continues to suffer from the effects of almost thirty years of civil war which has raged across all three largely autonomous zones: Somaliland, Puntland and South Central Somalia. The president is the head of state of Somalia and the commander-in-chief of the Somali Armed Forces. The current president is Mohamed Abdullahi Mohamed elected in 2017. The next legislative and presidential elections are scheduled for 2020, when the government is planning to hold the first popular vote in decades.

Political conditions remain challenging from both internal and external perspectives. Internally, recent armed conflict between Somaliland and Puntland could pose a risk to regional stability. Externally, relations with foreign partners will remain crucially important for the country’s overall stability, given its dependence on aid and foreign militaries.

Economic Trend

*Forecast
Source: International Monetary Fund (IMF)

Despite recent progress on state and peace building and economic reform, Somalia continues to face significant development and social challenges. The pastoral livestock industry is the mainstay of the economy, employing around 60% of the population and generating an estimated 80% of the country's foreign-exchange receipts. However, the severe drought in 2016-17 devastated the industry and it will take several years for herders to rebuild their livelihoods. While the ongoing favorable rainy season in 2018 may support economic recovery, recent floods in central and southern Somalia could lead to food insecurity in some areas. The authorities are developing programs, with the help of donors, to improve overall economic and social resilience.

Hong Kong – Somalia Trade

Source: Census and Statistics Department of Hong Kong

Total exports from Hong Kong to Somalia increased by 7.1% from HK$13.5 million in 2016 to HK$14.5 million in 2017. The top three export categories to Somalia were: (1) telecommunications and sound recording and reproducing apparatus and equipment (+1495.5%), (2) office machines and automatic data processing machines (+67.3%), and (3) professional, scientific and controlling instruments and apparatus (-42.6%), which represented 74.1% of total exports to Somalia.

Source: Census and Statistics Department of Hong Kong

HKECIC Underwriting Experience

The Hong Kong Export Credit Insurance Corporation (HKECIC) offers coverage on Somalia buyers with payment terms in Irrevocable Letter of Credit (ILC). In the past 12 months (from October 2017 to September 2018), there was no insured business on Somalia.

Please click here to download the charts (PDF format).

Last update: 8 Oct 2018

Source: Economist Intelligence Unit

Political Highlights

The Philippines is a republic with a presidential form of government wherein power is equally divided among its three branches: executive, legislative, and judicial. The president, who is limited to a single six-year term, is both the head of state and head of government. The mid-term elections for the seats in Senate and House of Representatives are scheduled in May 2019.

The Philippines has faced separatist movements for four decades in the southern region. The previous Aquino administration and the Moro Islamic Liberation Front (MILF), the country’s largest Muslim rebel group, signed a comprehensive peace agreement in 2014. The deal grants the Mindanao region greater political autonomy in exchange for MILF’s abandoning full independence from the country. In July 2018, president Duterte signed the long-delayed law (Bangsamoro Organic Law), commencing the long and complicated process to implement the 2014 peace agreement with the MILF.

Economic Trend

^Forecast
Source: Economist Intelligence Unit

Source: Economist Intelligence Unit

Political Highlights

Palestine is an Arab state consisting of two distinct areas: the West Bank and the Gaza Strip. In the West Bank, Fatah, formerly known as the Palestinian National Liberation Movement, a secular political party lead by Mahmoud Abbas, is in power. In the Gaza Strip, the government is led by the Islamist group Hamas. Fatah and Hamas agreed to hold belated presidential and legislative council elections before the end of 2018, but chances of them being held are receding as a result of differences in ideology and attitude towards Israel conflict.

Palestine has had a long-standing conflict with Israel, Palestinians and Israeli Jews both claim descent from the ancient peoples of the lands they now contest. Israel refuses to consider Hamas a legitimate government, and only considers the leadership of the West Bank to be its legitimate negotiating partner. Since the Hamas’ group controlled the Gaza Strip in 2007, they have fought three wars with Israel. Despite the United Nations (UN) and Egyptian officials’ efforts to broker a peace deal in the past two decades, Israeli-Palestinian talks have remained stalled.

Economic Trend

The lack of peace has created a challenging economic situation in Palestine. Donor support has significantly declined in recent years and investor confidence remains weak because of the lack of political progress and ongoing restrictions put in place by Israel. According to the IMF, despite still solid growth in the West Bank, the sharp decline in activity in Gaza weighed on the Palestinian economy. In the first quarter of 2018, economic growth in the West Bank was close to 5% while the 6% decline in Gaza brought the overall growth rate down to 2%.

Palestine does not have its own currency. In the West Bank, the Israeli new shekel and Jordanian dinar are widely accepted. In recent years, attempts have been made to reduce reliance on the shekel, but there has been no significant progress.

HKECIC Underwriting Experience

The Hong Kong Export Credit Insurance Corporation (HKECIC) offers coverage on buyers in Palestine with payment terms in Irrevocable Letter of Credit (ILC). In the past 12 months (from September 2017 to August 2018), there was no insured business on Palestine.

Last update: 24 Sep 2018

Source: Economist Intelligence Unit

Political Highlights

Kyrgyzstan, officially the Kyrgyz Republic, has been one of most unstable country in Central Asia, experiencing multiple revolutions and major ethnic violencein the early 1990s and in 2010. The country adopted a new constitution after the 2010 revolution, establishing a predominantly parliamentary system of government. In December 2016, further amendments to the constitution were made that shifted further powers from the presidency to the parliament and the prime minister. The amendments prevent the president from dismissing parliament or calling early elections. Sooronbai Zheenbekov, the Social Democratic Party of Kyrgyzstan (SDPK) candidate and a former prime minister, was elected as the country’s president in October 2017 and Mukhammedkaliy Abylgaziyev was nominated by SDPK as the prime minister in April 2018. The next parliamentary election is due in October 2020.

Kyrgyzstan joined the Russian-led Eurasian Economic Union (EEU) in 2015. The union aims to create a single market for the free movement of goods and services over a total population of more than 180 million people, in a similar way as the European Union. Kazakstan is one of Kyrgyzstan’s largest trading partner and also the main destination for exports of food and agricultural products, as well as the key transit country for trade with Russia and Eastern Europe. While bilateral relations have historically been cordial, their recent trade disputes in late 2017 have increased tensions. Specifically, Kazakhstan enforced strict controls and customs checks of goods from Kyrgyzstan, claiming the need to properly track the goods entering the EEU through the Kyrgyz borders. The dispute was resolved in December 2017 after an agreement was reached between the two countries.

Economic Trend

* Forecast
Source: Economist Intelligence Unit

The improving regional environment boosted the country’s economic activity, although the border tension with Kazakhstan slowed trade and dampened activity in late 2017. Economic growth reached 4.5% in 2017 and the main driver of growth was the industrial sector with a growth rate of 11.8%. Increased remittances and gold exports have narrowed the current account deficit and shored up foreign exchange reserves. Together with relatively low food and energy prices the country has kept inflation below the 5-7% target range despite the increase in economic activity.

The country was supported by a US$ 94.2 million three-year Extended Credit Facility (ECF) approved by the IMF in 2015. In exchange for the assistance, the government is required to implement prudent macroeconomic policies and structural reforms. Fiscal consolidation remains essential to rebuild buffers and ensure debt sustainability. Consolidation include focus on increasing tax revenues by implementing permanent measures, such as broadening the tax base and strengthening the tax and custom administration.

Hong Kong – Kyrgyzstan Trade

Source: Census and Statistics Department of Hong Kong

Total exports from Hong Kong to Kyrgyzstan increased by 54.5% from HK$59 million in 2016 to HK$91 million in 2017. The top three export categories to Kyrgyzstan were: (1) telecommunications and sound recording and reproducing apparatus and equipment (+67.6%), (2) photographic apparatus, equipment and supplies and optical goods; watches and clocks (+125.2%), and (3) electrical machinery, apparatus and appliances, and electrical parts thereof (+113.1%), which represented 92.5% of total exports to Kyrgyzstan.

Source: Census and Statistics Department of Hong Kong

HKECIC Underwriting Experience

The Hong Kong Export Credit Insurance Corporation (HKECIC) offers coverage on Kyrgyzstani buyers with payment terms in Irrevocable Letter of Credit (ILC). In the past 12 months (from September 2017 to August 2018), there was no insured business on Kyrgyzstan.

Please click here to download the charts (PDF format).

Last update: 21 Sep 2018

Sources: Economist Intelligence Unit, World Trade Organisation

Political Highlights

Guyana is a presidential republic wherein the president is the Head of State, Head of Government and Commander-In-Chief of the armed forces. In 2015, a centre-left coalition government was formed consisting of A Partnership for National Unity (APNU, a mainly Afro-Guyanese group) and the Alliance for Change (AFC), led by president David Granger, and holds a slim majority of just 33 of 65 seats in the National Assembly. The opposition People’s Progressive Party/Civic (PPP/C), a largely Indo-Guyanese party, holds nearly one-half of the seats, enabling it to block attempts to reform the constitution. The next general election is due by May 2020.

Economic Trend

*Forecast
Source: International Monetary Fund

Subsistence agriculture on the basis of primitive methods and mining are Guyana's most important economic activities. The country’s top exports are gold, rice, bauxite and raw sugar. Economic growth slowed in 2017 on the account of lower than expected mining output and weak performance in the sugar sector. Economic growth is projected to be 3.4% in 2018, driven by continued strength in the construction and rice sectors, and a recovery in gold mining, according to the IMF.

The recent discovery of large offshore oil reserves in 2015 will boost the country’s economic situation. Oil production is expected to commence in 2020, and have significantly improved the country’s medium and long term outlook.

Hong Kong – Guyana Trade

Source: Census and Statistics Department of Hong Kong

Total exports from Hong Kong to Guyana decreased by 7.3% from HK$14.4 million in 2016 to HK$13.4 million in 2017. The top three export categories to Guyana were: (1) telecommunications and sound recording and reproducing apparatus and equipment (+174.3%), (2) manufactures of metals (-17.8%), and (3) power generating machinery and equipment (+100%), which represented 75.0% of total exports to Guyana.

Source: Census and Statistics Department of Hong Kong

HKECIC Underwriting Experience

The Hong Kong Export Credit Insurance Corporation (HKECIC) offers coverage on Guyanese buyers with payment terms in Irrevocable Letter of Credit (ILC).  In the past 12 months (from September 2017 to August 2018), there was no insured business on Guyana.

Please click here to download the charts (PDF format).

Last update: 19 September 2018

Source: The World Factbook

Political Highlights

Situated at a large upraised coral atoll in the South Pacific Ocean, Niue became a British Protectorate in 1900 and was annexed to New Zealand in 1901. In 1974, the people of Niue adopted a Constitution providing for self-government in free association with New Zealand. Under the Constitution, New Zealand provides necessary economic and administrative assistance, and is responsible for the country's defence. The British monarch is the head of state, while the premier is the head of government who is elected by the unicameral legislative assembly for a three-year team. Toke Talagi has been the country’s primer since 2008 and was re-elected in 2011, 2014 and 2017.

Economic Trend

Niue’s economy faces many constraints including limited land, poor soil and a lack of skilled professionals. In particular, the country has suffered a declining population in recent years. As Niueans are New Zealand citizens, many Niueans had emigrated to New Zealand for the purpose of working or studying. The economy is heavily reliant on the financial aid from and trade with New Zealand, including the New Zealand Aid Programme, which is aimed to support Niue’s government to provide core public services and develop the tourism industry. Besides, New Zealand is also the biggest trading partner of Niue, who depends on imported fuel and food from New Zealand to supplement its subsistence agriculture and fishing.

HKECIC Underwriting Experience

The Hong Kong Export Credit Insurance Corporation (ECIC) imposes no restrictions on covering Niueans buyers. In the past 12 months (from September 2017 to August 2018), there was no insured business on Niue.

Last update: 17 September 2018

*Most recent data available
Sources: Economist Intelligence Unit, World Trade Organization

Political Highlights

Uruguay is a constitutional republic with an elected president and a bicameral legislature. It has a strong democracy and ranks highly in global institutional quality rankings. The broad political consensus has anchored the country’s political and economic stability. President Tabaré Vázquez assumed office in 2015 for a five-year term and the next presidential and parliamentary elections are scheduled in October 2019. Owing to term limit, Vázquez is barred for the next presidential election while his administration will continue to target growth and fiscal consolidation for the remaining period.

The Vázquez government's main goal is to boost Uruguay’s access to international export markets as a means of accelerating economic growth. The European Union (EU) and South America’s Mercosur bloc (Argentina, Brazil, Paraguay, and Uruguay) began a fresh round of trade talks in June 2018 with renewed optimism that negotiators may be nearing an accord. After 20 years of talks, the two sides have agreed most chapters in the accord, but differences over farm and auto industry issues remain.

Economic Trend

*Forecast
Source: International Monetary Fund (IMF)

Uruguay has been growing consistently over the past decade, and it recorded stronger GDP growth in 2017. A relatively tight monetary policy stance and an appreciating exchange rate have contributed to a notable decline in inflation, bringing it within the central bank’s target range of 3-7% for the first time in seven years. The current account balance has been improving and is now in surplus, while the government has reduced its fiscal deficit and continues to be able to access international markets on favorable terms. The increase in unemployment since 2014 has come to a halt (7.8% in July 2018), and the new round of wage negotiations the government initiated in March 2018 should contribute to reducing unemployment gradually to 7.3% by 2021, according to estimates by S&P.

Uruguay is a largely middle-class society with a relatively strong social contract that emphasizes consensus and social cohesion. The country has become increasingly integrated in world markets, benefitting from large inward foreign direct investment.

Hong Kong – Uruguay Trade

Source: Census and Statistics Department of Hong Kong

Total exports from Hong Kong to Uruguay increased by 21.2% from HK$647 million in 2016 to HK$784 million in 2017. The top three export categories to Uruguay were: (1) telecommunications and sound recording and reproducing apparatus and equipment (+63.6%), (2) office machines and automatic data processing machines (+50.7%), and (3) tobacco and tobacco manufactures (-40.7%), which represented 79.9% of total exports to Uruguay.

Source: Census and Statistics Department of Hong Kong

HKECIC Underwriting Experience

The Hong Kong Export Credit Insurance Corporation (HKECIC) imposes no restriction on covering Uruguay buyers. In the past 12 months (from September 2017 to August 2018), there was no claim payment or payment difficulty case reported against Uruguay buyers.

Please click here to download the charts (PDF format).

Last update: 13 September 2018

Source: Economist Intelligence Unit

Political Highlights

Bangladesh is a federal republic governed under a parliamentary system. The secular and ruling centre-left Awami League (AL) has been in power since 2009. It has been focusing on improving ties with India and limiting religious influences in politics. The president is the Head of State while the prime minister is the Head of Government. The legislature is a unicameral consisting of 350 seats of which 300 of them from the territorial constituencies and the remaining are reserved for women appointed by political parties. Prime Minister Sheikh Hasina was re-elected for her third term for another five years in 2014 after the ruling AL won a landslide victory in the general election. The next general election is due by December 2018, and it expect that the AL to maintain its majority in parliament.

The country is officially a secular society but with its Muslim-majority, the country has seen a rise of conflict and violent attacks. Tension between secularists and conservative Muslims will continue to pose threats to social stability. Although the country was classified as a lower middle income country by the World Bank and the government has made substantial progress in reducing poverty, almost 25% of the populations are still living in poverty. The government's priority is to promote economic development and continue to maintain its broadly business-friendly policies, in order to promote private-sector participation in the economy and attract foreign investment.

Economic Trend

* Estimates  ^Forecast
Source: Economist Intelligence Unit

Bangladesh is the second biggest garment supplier in the world, accounting for 6.5% share of the market in 2017, according to the World Trade Organisation (WTO). Garment manufacturing is the backbone of the country’s economy, generating approximately 80% of total export revenues. With plentiful supply of low-cost labor force, the country has been able to attract increasing amount of foreign direct investment in the sector. The consistent economic growth of over 6% over the past decade has made the country one of the world’s fastest-growing economies.

The government has implemented consistent monetary policy and fiscal discipline that help in stable economic growth in recent years. Inflation has eased to 5.5% in August 2018, helped in part by favorable agricultural production. Infrastructure remains the bottlenecks of economic growth in Bangladesh. The World Bank estimated that Bangladesh must spend US$7.4 billion – US$10 billion a year until 2020 to bring its power grids, roads and water supplies up to the standard needed to serve its growing population. Other priority sectors identified by the World Bank included water supply and sanitation, solid waste management, and telecommunications.

Hong Kong – Bangladesh Trade

Source: Census and Statistics Department of Hong Kong

Total exports from Hong Kong to Bangladesh increased by 1.0% from HK$11,616 million in 2016 to HK$11,757 million in 2017. The top three export categories to Bangladesh were: (1) textile yarn, fabrics, made-up articles and related products (-3.3%), (2) telecommunications and sound recording and reproducing apparatus and equipment (+13.5%), and (3) articles of apparel and clothing accessories (-2.7%), which represented 68.0% of total exports to Bangladesh.

Source: Census and Statistics Department of Hong Kong

HKECIC Underwriting Experience

The Hong Kong Export Credit Insurance Corporation (HKECIC) imposes no restrictions on covering Bangladeshi buyers. In the past 12 months (from September 2017 to August 2018), the insured business from Bangladesh was limited and there was no claim payment or payment difficulty case reported.

Please click here to download the charts (PDF format).

Last update: 13 September 2018

Source: The World Factbook

Political Highlights

The Commonwealth of Dominica (“Dominica”) is a republic with a non-executive presidency and parliamentary democracy. The president is the head of state elected by the House of Assembly and holds office for a term of five years, while executive power rests with the cabinet headed by the prime minister. Roosevelt Skerrit has been the country’s prime minister since 2004 and was re-appointed in 2009 and 2014. The unicameral parliament consists of a 30 members of which 21 of them are directly elected by universal suffrage.

While Dominica was still recovering from tropical storm Erika in 2015, the country was hard hit by the Hurricane Maria in September 2017, and living conditions have been tough ever since, as Maria caused widespread devastation with damages estimated at US$1.3 billion, or 226% of GDP. Economic recovery and reconstructions continued to dominate the political agenda. The government’s key priorities include securing financial backing for its new airport project, the key to expansion of the tourism industry, as well as helping farmers to adopt climate-smart practices and encourage resilient building practices in the housing sector.

Economic Trend

*Forecast
Source: International Monetary Fund (IMF)

In September 2017, the Hurricane Maria affected almost every household and economic sector of Dominica. The International Monetary Fund (IMF) has projected that the island’s output will decrease by 14% in 2018, largely due to the steep decline in agriculture and tourism services. The fall in output and government revenue, coupled with increased expenditure for rehabilitation and reconstruction, will lead to a substantial worsening of fiscal and external deficits.

The country’s near-term current account deficits will be financed mainly with official and bilateral loans, grants, and use of government deposits. The World Bank has approved a financing package of US$ 115 million over 3 years, of which US$ 75 million were concessional loans and the remainder was grants. The government is implementing cost-effective fiscal policies to support the recovery while containing the expansion of public debt.

ECIC Underwriting Experience

The Hong Kong Export Credit Insurance Corporation (ECIC) imposes no restriction on covering Dominica buyers. In the past 12 months (from September 2017 to August 2018), there was no insured business on Dominica.

Please click here to download the charts (PDF format).

Last update: 12 September 2018

Source: Economist Intelligence Unit

Political Highlights

Greece is a parliamentary republic with 300 members directly elected for a four-year term. The president is the head of state without executive powers while the prime minister is the head of government. Political uncertainty has increased following the outbreak of the Greek debt crisis in 2009, which the country has held four snap elections since then. The current coalition government, led by Prime Minister Alexis Tsipras, consists of Syriza Coalition of the Radical Left (Syriza) and the nationalist Independent Greeks (AE). The government has only a slim majority in the parliament and is vulnerable to another early election as there remains strong political and popular opposition to the austerity measures. The next parliamentary election is due by October 2019.

Greece faces the challenges of managing the refugee crisis. More than 1 million refugees and migrants arrived in Greece in 2015 and early 2016, according to the United Nations Refugee Agency. Despite a decline in arrival in 2016, the influx began increasing again from the second half of 2017, when the Greek government began taking over full responsibility for Greece’s refugee response. The refugee crisis is putting pressure on the government and adding burden to Greece’s already strained economy.

Separately, Greece and Macedonia set aside three decades of Macedonia naming dispute as the two countries reached a historic accord in June 2018. Under the deal, Macedonia will rename itself the “Republic of North Macedonia” which replaces the interim name “Former Yugoslav Republic of Macedonia” under which it joined the United Nations 23 years ago.

Economic Trend

^Forecast
Source: Economist Intelligence Unit

Source: Economist Intelligence Unit

Political Highlights

Egypt is a northern African country which emerged as a republic in 1953. The president is the chief of state elected by absolute majority vote for a four-year term and is allowed to serve a second consecutive term. The incumbent President Abdel Fattah el-Sisi won a second term in the March 2018 presidential election. The country adopts a unicameral legislature with 596 members in the House of Representatives. The prime minister Mostafa Madbouly is the head of government appointed by the president in June 2018.

Situated at the crossroads of Europe, Africa and Asia, Egypt plays a key role in regional stability. It also acts as important hub in international trade and energy markets through the operation of the Suez Canal connecting the Mediterranean Sea and Red Sea. The government's priorities include maintaining cordial ties with the US and European Union, building relationships with Russia and China, and seeking to secure economic support from the Gulf Arab states.

Along with Saudi Arabia, the UAE, Bahrain and other countries, Egypt declared a diplomatic boycott of Qatar in June 2017, accusing it of funding and supporting regional terrorism. It is expected that Egypt and Saudi Arabia will continue to step up efforts against security threats from Islamist groups, while the relations with Qatar will remain tense.

Economic Trend

*Estimate ^Forecast
Source: Economist Intelligence Unit

Source: Economist Intelligence Unit

Political Highlights

Senegal is a unitary republic with President as the head of state and the Prime Minister as the head of government. The country’s political environment has been relatively stable in the past years. The incumbent President Macky Sall is expected to secure another term in the 2019 election, given the ruling Benno Bokk Yakaar (BBY) coalition won another parliamentary majority in the legislative election in 2017.

Senegal is one of the poorest countries with nearly half of the population living in poverty. The government has made education and training a priority sector and has worked with multiple partners to support the implementation of the country’s education sector development plan. Furthermore, the government continues to secure foreign direct investment and work towards the development of a railway linking Dakar to the Casamance region, with the aim of boosting economic activity.

On a diplomatic front, Senegal maintains close ties with France, both economic and security-related. It is also co-operating with the US through a defence agreement signed in 2016. The US military also used Senegal as a staging post from 2014 to transport troops, health workers and supplies to West Africa to combat an outbreak of the Ebola virus.

Economic Trend

* Forecast
Source: International Monetary Fund

Senegal’s economic growth has remained above 6% over the past few years and reached 7.2% in 2017, driven by higher private investment, particularly in oil, energy, transport infrastructure, agriculture, tourism, textiles and information technology. Investments in the power sector in recent years will continue to underpin economic expansion throughout 2018‑22, while budget deficit and inflation is expected to increase driven by election and security spending.

The country’s structural current account deficit was attributable to its continued reliance on imports of energy and capital goods. It is expected that the deficit will continue to widen on slowing export growth as well as increasing capital imports.

The recent discovery of hydrocarbons gas and oil fields could further improve Senegal’s economic situation while extraction is likely to be complex for its underdeveloped industry. The World Bank has offered support to the country including practical advice and technical assistance, along with support for strengthening government capacity whenever it is engaged in complex gas negotiations.

Hong Kong –  Senegal Trade

Source: Census and Statistics Department of Hong Kong

Total exports from Hong Kong to Senegal increased by 43.7% from HK$961 million in 2016 to HK$1,381 million in 2017. The top three export categories to Senegal were: (1) telecommunications and sound recording and reproducing apparatus and equipment (+43.2%), (2) non-ferrous metals (+211.7%), and (3) electrical machinery, apparatus and appliances, and electrical parts thereof (+117.3%), which represented 98.0% of total exports to Senegal.

Source: Census and Statistics Department of Hong Kong

ECIC Underwriting Experience

The Hong Kong Export Credit Insurance Corporation (ECIC) imposes no restrictions on covering Senegal buyers.  In the past 12 months (from August 2017 to July 2018), there was no insured business on Senegal.

Please click here to download the charts (PDF format).

Last update: 30 August 2018

Source: Economist Intelligence Unit

Political Highlights

Tunisia is a unitary semi-presidential representative democratic republic with the President as head of state and Prime Minister as head of government. In July 2018, President Beji Caid Essebsi called for Prime Minister Youssef Chahed to step down or get a vote of confidence in Parliament if the country’s political and economic crisis continues, but Chahed rejected and said that a change of government would put the economy at risk and shake the confidence of international lenders. Looking forward, party positioning ahead of the 2019 legislative and presidential elections is a source of policy risk and could lead to renewed government instability.

Poverty and unemployment in Tunisia have soared over the past decade. This triggered Tunisia’s revolution in 2011 and since then nine cabinets have failed to resolve the country’s economic problems. The unemployment rate remained high in Q1 2018 at 15.4% and the situation of youth unemployment was daunting, with a record rate of 36%.

Economic Trend

*Forecast
Source: Economist Intelligence Unit

The political transition, recurrent social tensions, domestic security shocks as well the political and security situation in the Middle East and North Africa (MENA), have delayed the country’s needed reforms. Economic growth performance after the revolution in 2011 remained weak despite a modest acceleration in 2017, mainly driven by agriculture and services. While the economy is displaying signs of economic recovery, it is still relying on loans provided by the International Monetary Fund (IMF). In July 2018, the IMF approved the release of a US$ 249 million loan tranche to Tunisia, the fourth tranche from the four-year US$ 2.9 billion stimulus package.

The country’s current account deficit reached a record high at 10.8% of GDP in 2017 as higher energy imports outpaced the increase in tourism receipts and revenue from workers abroad. The widening current account deficit depressed foreign direct investment and the dinar continued to fall despite the central bank’s interventions, which had led to a decrease in gross international reserves to the lowest level in more than 25 years. Inflation reached 7.5% in August and the central bank has raised its key interest rate to 6.75%, the second hike in three months to tackle inflation.

Hong Kong – Tunisia Trade

Source: Census and Statistics Department of Hong Kong

Total exports from Hong Kong to Tunisia decreased by 20.9% from HK$1,539 million in 2016 to HK$1,218 million in 2017. The top three export categories to Tunisia were: (1) telecommunications and sound recording and reproducing apparatus and equipment (-39.2%), (2) electrical machinery, apparatus and appliances and electrical parts thereof (+19.0%), and (3) office machines and automatic data processing machines (+7.3%), which represented 84.9% of total exports to Tunisia.

Source: Census and Statistics Department of Hong Kong

HKECIC Underwriting Experience

The Hong Kong Export Credit Insurance Corporation (HKECIC) imposes no restrictions on covering Tunisian buyers with the exception of those under sanctions. In the past 12 months (from August 2017 to July 2018), there was no claim payment or payment difficulty case reported against Tunisian buyers.

Please click here to download the charts (PDF format).

Last update: 24 Aug 2018

*Most recent data available
Sources: Economist Intelligence Unit, World Trade Organization

Political Highlights

Bahrain is a constitutional monarchy with an elected legislative assembly. The National Assembly is bicameral with a four-year term and the next election is due in late 2018. The government is dominated by members of the Sunni al-Khalifa royal family headed by the King Hamad bin Isa al-Khalifa. The country's Shia Muslim majority claims that they are economically and politically marginalized by the Sunni Muslim ruling family, which holds most of the important cabinet posts. It is anticipated that the political tensions will continue and the upcoming elections could act as a focal point, increasing political violence and protests.

Bahrain is a member of the coalition of Arab states, which has imposed a boycott on Qatar in June 2017, cutting diplomatic ties as well as trade and transport links with the country. It is anticipated that the political tensions within the Gulf Cooperation Council (GCC) countries to persist over the next few years. Meanwhile, Bahrain seeks to shore up its alliances with Western countries including the US and UK.

Economic Trend

^Forecast
Source: Economist Intelligence Unit, International Monetary Fund (IMF)

Bahrain is a relatively diversified economy with the non-oil sector contributed by more than 85% of its output. Its economy and financial system continued to perform well in 2017, with the economy expanding by 3.8%, despite the government's weak fiscal position and low level of foreign reserves.

In April 2018, Bahrain announced it had made a significant discovery of oil and gas in the offshore Khaleej Al Bahrain Basin, the largest find in the country since the 1930s. Oil production from the recently discovered large off-shore oil reservoir will likely, in the long term, improve the country's fiscal and external position.

While Bahrain was battered by the swings in oil prices, it is in talks with Saudi Arabia, the UAE and Kuwait for support that would help reducing its ballooning debt and shore up foreign exchange reserves. In August 2018, Moody's downgraded Bahrain's credit rating from B1 to B2 and maintained its negative outlook. The key drivers for the rating downgrade were due to a further rise in the country's external and government liquidity risks to particularly elevated levels and the risk that financial support from the GCC is not timely and comprehensive enough to maintain its credit profile.

Hong Kong – Bahrain Trade

Source: Census and Statistics Department of Hong Kong

Total exports from Hong Kong to Bahrain decreased by 17.7% from HK$ 852 million in 2016 to HK$ 701 million in 2017. The top three export categories to Bahrain were: (1) telecommunications and sound recording and reproducing apparatus and equipment (-26.5%), (2) power generating machinery and equipment (-53.0%), and (3) office machines and automatic data processing machines (-25.2%), which represented 58.4% of total exports to Bahrain.

Source: Census and Statistics Department of Hong Kong

HKECIC Underwriting Experience

The Hong Kong Export Credit Insurance Corporation (HKECIC) imposes no restrictions on covering Bahrain buyers. In the past 12 months (from August 2017 to July 2018), the insured business from Bahrain was limited and there was no claim payment or payment difficulty case reported.

Please click here to download the charts (PDF format).

Last update: 22 August 2018

* Most recent data available
Source: Economist Intelligence Unit, World Trade Organisation

Political Highlights

Rwanda is a landlocked nation in eastern Africa. The president, directly elected by universal suffrage, is both the Head of State and Chief of Government. The bicameral legislature consists of a 24-seat upper house and a 80-seat lower house. Paul Kagame, who has ruled the country since 2000, was re-elected as president with an overwhelming 99% of vote in the presidential election in 2017. Kagame-led ruling party, the Rwandan Patriotic Front (RPF), looks set for another majority against a weak opposition in the coming parliamentary election in September 2018.

Despite the country was severely devastated by the genocide in 1994, the country’s political environment turned relatively stable after RPF took control of the country. Since early 2000s, the government has made socio-economic and political progress and consolidated peace among Rwandans. Remarkably, the country was ranked the third least corrupt country in Africa in 2017, according to Transparency International.
 

Economic Trend

*Estimate ^Forecast #Actual
Source: Economist Intelligence Unit

Sources: Economist Intelligence Unit

Political Highlights

Iraq is a federal parliamentary republic. It is a multi-party system whereby the executive power is exercised by the prime minister and the president, and legislative power is vested in the Council of Representatives and the Federation Council. The Sairoon Alliance of Shia leader Moqtada al-Sadr won the largest number of parliamentary seats but failed to secure a majority in the May 2018 election and currently in talks to form a coalition with the Nasr alliance led by prime minister Haider al-Abadi, along with two other parliamentary groups. The political uncertainty over the make-up of the new government has raised tensions at a time when public impatience is growing over poor basic services, high unemployment and the slow pace of rebuilding.

Conflicts between the country’s three main groups—Shiite Arabs, Sunni Arabs and Kurds, as well as different national interests have complicated the governance. Years of fighting have devastated the country’s economy and infrastructure. With the aided by Iranian-backed Shiite militias and a US-led coalition, Iraq recaptured its second-largest city Mosul from extremists in July 2017. The government estimated the country needs over US$80 billion for the reconstruction of Mosul and mass of territory.

The upcoming priorities of the government will continue to be guided by both reconstruction efforts and the economic reform program supported by IMF’s three-year USD 5.34 billion Stand-By facilities approved in July 2016. The government already drew USD 2.1 billion from the facilities, while IMF has pointed out that the country needs to implement further fiscal consolidation measures in order to keep the program on track.

Economic Trend

*Forecast
Source: International Monetary Fund

Iraq is the second-largest oil producer in the Organization of the Petroleum Exporting Countries (OPEC) with the world’s fourth-largest proven crude reserves. Economic growth is largely dependent on the oil sector. Mineral fuels including oil exports represent over 95% of the country’s total exports in 2017.  The economy contracted in 2017 due to the decrease in oil production caused by the war and low oil prices, while non-oil growth turned to positive given the improved security situation and government’s reconstruction effort. Growth in 2018 is set to accelerate, supported by higher oil prices and production.

China is ramping up its role in Iraqi reconstruction as Iraq is located on the Al-Hareer Road linking Asia, the Middle East and Europe , which facilitated the exchange of goods and products. Sino-Iraqi relations benefit from the backdrop of the Belt and Road Initiative, which seeks to foster growing East-West overland trade by promoting greater logistical connectivity. The fast growing in Iraq-China partnership was highlighted by a dramatic increase in oil exports to China, which rose from zero in 2007 to 270 million barrels annually by 2017 and accounted for about 8.8% of total Chinese oil imports.

Hong Kong – Iraq Trade

Source: Census and Statistics Department of Hong Kong

Total exports from Hong Kong to Iraq decreased by 49.6% from HK$932 million in 2016 to HK$470 million in 2017. The top three export categories to Iraq were: (1) telecommunications and sound recording and reproducing apparatus and equipment (-56.4%), (2) office machines and automatic data processing machines (+21.1%), and (3) electrical machinery, apparatus and appliances, and electrical parts thereof (+11.6%), which represented 95.2% of total exports to Iraq.

Source: Census and Statistics Department of Hong Kong

HKECIC Underwriting Experience

The Hong Kong Export Credit Insurance Corporation (HKECIC) offers coverage on Iraqi buyers with payment terms in Irrevocable Letter of Credit (ILC).  In the past 12 months (from August 2017 to July 2018), there was no insured business on Iraq.

Please click here to download the charts (PDF format).

Last update: 20 August 2018

Source: Economist Intelligence Unit

Political Highlights

Pakistan emerged as an independent state in 1947 and is a member of the Commonwealth. The country is a federal parliamentary republic with the president as the head of state elected for a five-year term by members of the lower and upper house of parliament and four provincial assemblies. There is a bicameral legislature. The lower house is the national assembly and the upper house is the senate. The prime minister is the head of government elected by the national assembly. The Pakistan Tehreek-e-Insaf (PTI) led by Imran Khan became the single largest party in the general election held in July 2018, winning 158 of the 342 seats but failed to win a simple majority to form the government. Imran Khan, the prime minister-in-waiting, is expected to form a governing coalition with the opposition parties.

On the diplomatic front, China remains Pakistan's leading economic partner. The majority of funding from China has been allocated to energy and transport infrastructure projects including the China-Pakistan Economic Corridor (CPEC) under China's Belt and Road Initiative. Although public sentiment towards China remains favourable, the financing terms of CPEC investments will occasionally be a point of contention. Such disagreements, however, will not fundamentally threaten the strengthening of bilateral co-operation.

Economic Trend

Fiscal year ending 30 June
*Forecast
Source: Economist Intelligence Unit

Pakistan has a predominantly agricultural economy, with cotton, fisheries and forestry contributing about 25% of GDP, and it has large deposits of natural gas. Economic growth has been robust with strong growth registered in FY17-18, underpinned by increases in consumption and the improved performance of exports. The government has set a growth target of 6.2% for 2018-19 which is unlikely to be achieved amid an increase in the number of challenges including depleting foreign exchange reserves, weak currency and political uncertainties.

The country’s foreign exchange reserves have been sliding since the past two years, as remittances fall and imports increased. The monetary authorities have taken steps in recent months including uplift of key interest rates to address the deterioration in the external position. It is widely expected that, after the election, the new government would have to explore financing options from several sources including China and multilateral development banks, and possibly the International Monetary Fund (IMF). Higher oil prices has spiked the country’s annual inflation rate in June to 4-year high of 5.2%. The import bill and trade deficit is likely to remain high in FY18-19. To combat inflation and cool domestic demand, the State Bank of Pakistan in July has increased the third time its key interest rates to 7.5% in 2018.

Hong Kong – Pakistan Trade

Source: Census and Statistics Department of Hong Kong

Total exports from Hong Kong to Pakistan increased by 2.1% from HK$4,111 million in 2016 to HK$4,195 million in 2017. The top three export categories to Pakistan were: (1) telecommunications and sound recording and reproducing apparatus and equipment (-16.6%), (2) office machines and automatic data processing machines (+67.3%), and (3) electrical machinery, apparatus and appliances, and electrical parts thereof (+39.4%), which represented 61.7% of total exports to Pakistan.

Source: Census and Statistics Department of Hong Kong

ECIC Underwriting Experience

The Hong Kong Export Credit Insurance Corporation (ECIC) imposes no restriction on covering Pakistan buyers. In the past 12 months (from August 2017 to July 2018), the insured business from Pakistan was limited and there was no claim payment or payment difficulty case reported.

Please click here to download the charts (PDF format).

Last update: 17 Aug 2018

*Most recent data available
Source: Economist Intelligence Unit

Political Highlights

Sudan is a presidential republic wherein the president is the Head of State, Head of Government, and Commander-in-chief of the armed forces. Legislative duties are administered by the bicameral parliament consisting of a 426-member National Assembly and a Council of States composed of two representatives elected by each state assembly.

South Sudan gained independence from Sudan through a referendum in 2011. Although most of the oil production capacity in these two countries is in South Sudan, the country is landlocked and remains dependent on Sudan’s export pipelines and port. Civil unrest, disagreements over oil revenue sharing and border disputes have curtailed oil production and investment in both countries.

Prolonged US economic sanctions against the unified Sudan allowed Asian national oil companies to dominate the oil sectors in both Sudan and South Sudan. China, India and Malaysia hold large stakes in the leading consortia that operate oil fields and pipelines. In October 2017, the US announced the full lifting of sanctions on Sudan which it had first imposed in 1997. The lifting may provide opportunities for other foreign investors to enter the industry and has also led to increased levels of trade with the US and a renewed push by the government to attract foreign investment.

Economic Trend

* Forecast
Source: Economist Intelligence Unit

Economic conditions in Sudan have been challenging since the secession of South Sudan in 2011, and the associated loss of the bulk of oil exports. The authorities have implemented partial policy adjustments to help stabilizing the economy and re-establish growth, by allowing for greater exchange rate flexibility and reducing fuel subsidies. However, these measures were insufficient toward sustained macroeconomic stability and broad-based growth. The revocation of US sanctions on trade and financial flows in October 2017 has strengthened optimism and led to reductions in costs of imports, trade, and international financial services.

However, with the country lost its major oil output in 2011 depriving it of a crucial source of foreign currency. The central bank has held the indicative exchange rate at 28 pounds to the US dollar but the currency is largely unavailable at that price. The crisis has deepened over the past year as the black market for US dollars has effectively replaced the formal banking system. The shortage of foreign currency and expensive black market for dollars sapped its ability to import and made prices soar. The International Monetary Fund (IMF) has urged Sudan to float its currency to boost growth and investment, a measure that the Sudanese government has opposed.

Hong Kong – Sudan Trade

Source: Census and Statistics Department of Hong Kong

Total exports from Hong Kong to Sudan decreased by 35.0% from HK$56.8 million in 2016 to HK$36.9 million in 2017. The top three export categories to Pakistan were: (1) electrical machinery, apparatus and appliances, and electrical parts thereof (+72.6%), (2) professional, scientific and controlling instruments and apparatus (+27.1%), and (3) telecommunications and sound recording and reproducing apparatus and equipment (-80.1%), which represented 55.2% of total exports to Sudan.

Source: Census and Statistics Department of Hong Kong

ECIC Underwriting Experience

The Hong Kong Export Credit Insurance Corporation (ECIC) offers coverage on Sudan buyers with payment terms in Irrevocable Letter of Credit (ILC). In the past 12 months (from August 2017 to July 2018), there was no insured business on Sudan.

Please click here to download the charts (PDF format).

Last update: 16 Aug 2018

Fiscal year ending 31 March
Source: Economist Intelligence Unit, Department of Commerce of India

Political Highlights

India is a federal republic governed under a parliamentary system. The ruling National Democratic Alliance (NDA) coalition has been in office since 2014 and is led by the centre-right Bharatiya Janata Party (BJP). The president is the Head of State while the prime minister is the Head of Government. The incumbent prime minister, Narendra Modi, is proving to be the country's most dominant political leader in decades and the NDA coalition is well placed to win a second five-year term at the parliamentary election in April-May 2019. The high popularity of Modi and the BJP helped bringing political stability to the country.

Externally, India-Pakistan over half century of conflict over control of Kashmir region sees a line of light. In August 2018, Modi congratulated the victory of new Pakistan Tehreek-e-Insaf (PTI) led by the new prime minister Imran Khan and both expressed to resolve the disputes through dialogue. 

India has strengthened security co-operation with the US in recent years.  However, the India-US relations is clouded by the recent trade disputes with tariffs being imposed from both sides, as a protectionist trade agenda is being pushed by the US.  Despite the current tensions are unlikely to escalate into a serious deterioration of the India-US ties, it may slow down the expansion of trade between the two countries.

Economic Trend

*Forecasts
Source: Economist Intelligence Unit

India’s real GDP grew by 7.3% in fiscal year 2017-18 (April – March), according to official data, confirming its status as the world’s fastest growing major economy in 2018. Economic expansion was driven predominately by private consumption and government expenditure. Also, the country was recovering from the effects of demonetization and the introduction of the Goods and Services Tax (GST) in previous years. It is expected to yield substantial growth dividends from higher efficiencies, and raise more revenues in the long term.

Though India’s increasing well-educated population and favourable demographics, majority of people still preoccupied with meeting their basic daily needs rather than following the latest consumer trends. While, middle-class households are growing and the country’s large population will become increasing important market for consumer goods.

While the external debt as a percentage of GDP is decreasing, economic risks remain tilted to the downside. On the external side, despite the reduction in imbalances and strengthening of buffers, the impact from intensified global financial market volatility could be disruptive. The current account remained in deficit at 3% of GDP in 2017-18, driven by a surge in the value of imports as oil prices remain high. The growth in exports was insufficient to offset the rising import bill. Also, the normalization of monetary policy in the US may also induce capital outflows from India’s debt market, putting downward pressure on the rupee.

Hong Kong – India Trade

Source: Census and Statistics Department of Hong Kong

Total exports from Hong Kong to India increased by 35.9% from HK$116,702 million in 2016 to HK$158,635 million in 2017. The top three export categories to India were: (1) non-metallic mineral manufactures (+40.3%), (2) telecommunications and sound recording and reproducing apparatus and equipment (+12.8%), and (3) non-ferrous metals (+236.0%), which represented 81.8% of total exports to India.

Source: Census and Statistics Department of Hong Kong

ECIC Underwriting Experience

The Hong Kong Export Credit Insurance Corporation (ECIC) imposes no restrictions on covering Indian buyers. Currently, the insured buyers in India are mainly small and medium-sized companies to listed companies. For 2017, when compared with 2016, the number and amount of credit limit applications on India decreased by 5.7% and 74.5% respectively, while insured business decreased by 2.5%. Major insured products were electrical appliances, electronics and clothing, which represented 85.8% of ECIC’s insured business on India.  The Corporation’s underwriting experience on India has been satisfactory, with two claim cases reported in the past 12 months (from July 2017 to June 2018), involving textiles, cameras and optical goods.

Please click here to download the charts (PDF format).

Last update: 14 August 2018

* Most recent data available
Source: Economist Intelligence Unit, World Trade Organization

Political Highlights

Libya is under an ongoing civil war in recent years. The country has splintered and has been divided into competing political and military factions based in the east and west of Libya since 2014. The country currently has two rival governments which have yet to establish law and order. One led by Fayez al-Sarraj based in western Libya and supported by the United Nations (UN), and another unrecognised government under the leadership of Abdullah al-Thinni based in the east, and also a plethora of armed groups that pledge allegiance to either administration. The Thinni administration is backed by a powerful Gaddafi-era general, Khalifa Haftar, who controls most of the east and centre of the country.

A UN-proposed roadmap for Libya was unveiled in early 2018. The UN Action Plan seeks to first approve an electoral law and hold a referendum to approve the new constitution. However, past experience suggests that any election timeline is likely to slip as a result of political deadlock or fresh conflicts.

Economic Trend

*Forecast
Source: Economist Intelligence Unit, International Monetary Fund

Libya's economy depends almost entirely on the performance of the oil sector. The economy contracted throughout 2013-16, mainly as a result of the collapse of oil production and the consequent fiscal constraints. In 2017, the country registered a major improvement in its macroeconomic performance due to the boost in production and export of oil. With the growth in oil revenues, budget deficit has declined but is forecast to persist due to spending on state wages and subsidies continue to constitute the majority of public expenditures. The inflation rate has been on the rise in recent years, attributable to the supply chain disruption, weakening local currency as well as the removal of food subsidies.

Since the 2011 revolution, Libya has focused on recovering from the effects of war and years of international isolation, which have strongly affected the quality of the country’s infrastructure. The rival governments have delayed infrastructure development, and focused on security and political transition. Some expansion is planned for 2019-2020 in the electricity, water, healthcare and transportation sectors, providing opportunities for local and foreign investors. Strengthening public resource management and adopting a clear strategy should be a priority once the security situation improves.

Hong Kong – Libya Trade

Source: Census and Statistics Department of Hong Kong

Total exports from Hong Kong to Libya increased by 21.9% from HK$49.7 million in 2016 to HK$60.6 million in 2017. The top three export categories to Libya were: (1) telecommunications and sound recording and reproducing apparatus and equipment (+18.9%), (2) office machines and automatic data processing machines (+106.9%), and (3) electrical machinery, apparatus and appliances, and electrical parts thereof (+34.2%), which represented 87.4% of total exports to Libya.

Source: Census and Statistics Department of Hong Kong

ECIC Underwriting Experience

The Hong Kong Export Credit Insurance Corporation (ECIC) offers coverage on buyers in Libya with payment terms in Irrevocable Letter of Credit (ILC). In the past 12 months (from August 2017 to July 2018), there was no insured business on Libya.

Please click here to download the charts (PDF format).

Last update: 3 August 2018

Source: Economist Intelligence Unit

Political Highlights

The Republic of Korea (often referred to as South Korea) is a presidential republic wherein the president is the Head of State, Head of Government and Commander-In-Chief of the armed forces for a single five-year term. Moon Jae-in from the Democratic Party was elected as president in May 2017. Taking advantage of his high approval rating after the inter-Korea summit in late April, the ruling Democratic Party won a landslide victory over the largest opposition Liberty Korea Party in the local elections in June 2018.

Unlike the supply-side-oriented policies pursued by the previous conservative administrations, Moon Jae-in seeks to implement a demand-driven economic programme to drive growth. The government is pursuing a sequence of policies aimed at narrowing income inequality and enhancing job security. These include increasing taxes on corporates entities and the wealthiest, raising the minimum wage as well as extending welfare benefits.

On the diplomatic front, the North Korea issues continue to dominate the national security of South Korea. The first meeting between the two Korean leaders in more than a decade in April followed by the subsequent historic summit between the US President Donald Trump and North Korea leader Kim Jong Un in June helped to ease the persistent political tensions. However, there are still growing concerns about whether the ongoing peace talks could lead to a genuine willingness for North Korea to denuclearize.

Economic Trend

^Forecast
Source: Economist Intelligence Unit

South Korea’s economic strength is based on its export sector, which made up over 50% of the country’s GDP. The export sector has enjoyed relatively high year-on-year growth rates driven by the global trade recovery in the wake of the global financial crisis in the last decade. While exports growth moderated in recent years compared to early 2010s, the current account is expected to remain in surplus thanks to the sustainable global growth momentum. However, the country’s exports are vulnerable to the rising protectionist sentiment and geopolitical tensions, among other things. In July, the central bank trimmed the country’s 2018 growth outlook to 2.9% from 3.0% on fears that the exports could be hit by the hit-for-tat tariffs imposed between the US and other nations.

The central bank of South Korea has kept its main policy interest rate unchanged at 1.5% since November 2017 after the first increase in more than six years. While loose monetary policy has supported economic growth in recent years, mounting household debt has become a side-effect. At the end of 2017, household debt accounted for approximately 75% of the country’s GDP, posting a drag on private consumption. Nevertheless, the growth in household debt slowed down in the first half of 2018 as the government stepped up measures to tighten lending terms.

Hong Kong – Korea Trade

Source: Census and Statistics Department of Hong Kong

Total exports from Hong Kong to the Republic of Korea increased by 4.9% from HK$54,040 million in 2016 to HK$56,672 million in 2017. The top three export categories to the Republic of Korea were: (1) electrical machinery, apparatus and appliances and electrical parts thereof (-3.9%), (2) telecommunications and sound recording and reproducing apparatus and equipment (+16.2%), and (3) office machines and automatic data processing machines (+51.6%), which represented 70.8% of total exports to the Republic of Korea.

Source: Census and Statistics Department of Hong Kong

ECIC Underwriting Experience

The Hong Kong Export Credit Insurance Corporation (ECIC) imposes no restrictions on covering buyers in the Republic of Korea. Currently, the insured buyers in the Republic of Korea range from small and medium sized companies to listed companies. For 2017, the number and the amount of credit limit applications on the Republic of Korea increased by 2.5% and 191.3% respectively, while insured business decreased by 24.6%. Major insured products were clothing (+4.7%), electronics (+132.9%) and metallic products (+90.3%), which represented 56.3% of ECIC’s insured business on the Republic of Korea. The Corporation’s underwriting experience on the Republic of Korea has been satisfactory, with one payment difficulty case and one claim case in the past 12 months (from July 2017 to June 2018).

Please click here to download the charts (PDF format).

Last update: 2 August 2018

Source: Economist Intelligence Unit

Political Highlights

Afghanistan is a land-locked nation located within South Asia and Central Asia. According to the constitution adopted in 2004, the president is both the Chief of State and Head of Government elected by absolute majority vote to serve a 5-year term. The national legislative is a bicameral National Assembly comprising a 102-seat upper house and a 249-seat lower house. Elections for the lower house was originally due to be held in 2015, but had been postponed to October 2018 over security concerns and electoral reform process.

With a long history of war and conflict, insecurity is the major risk to the country’s political and social stability. On the diplomatic front, policy is largely influenced by its security concerns, which gives Pakistan a crucial role over the country’s security dynamics.  

Economic Trend

* Estimate ^ Forecast # Actual
Source: International Monetary Fund

Source: Economist Intelligence Unit

Political Highlights

Bhutan is a constitutional monarchy with an elected parliamentary. The Prime Minister is the Head of Government while the King is the Head of State. Jigme Khesar Namgyel Wangchuck became the country’s King in 2006 after the abdication of his father Jigme Singye Wangchuck. The current ruling party, the People’s Democratic Party (PDP) led by the Prime Minister Tshering Tobgay, has a solid majority in the National Assembly by holding 32 of the 47 seats. The country’s political environment has been stable and Tshering Tobgay is expected to win a second term in office in the next general election scheduled in October 2018.

Bhutan is a landlocked country located between India and China. The country has strong diplomatic ties with India for decades, and India remains influential over its foreign policy, defence and commerce. The two counties are operating a free trade regime with most of the Bhutan’s exports go to India. India is also Bhutan’s largest creditor and donor of external aid. The government is attempting to strike a balance between economic development and retaining the country's traditional commitment to environmental and social wellbeing. Promoting economic growth will be largely dependent on the ongoing construction, with Indian assistance, of several large-scale hydropower projects. China is also another important dimension in India-Bhutan relations. In June 2017, the trijunction Doklam area disputed between Bhutan and China has led to a standoff between the Indian and Chinese troops for over 70 days, which ended after an agreement was reached.
 

Economic Trend

* Forecast
Source: The International Monetary Fund (IMF)

Bhutan is classified as one of the Least Developed Countries (LDCs) by the United Nations. Its economy is small with limited connections to global markets. The country's mountainous terrain is a fundamental constraint to growth and rural poverty reduction. Weak access to road and transport infrastructure isolates a large proportion of rural people from markets and social services, and limits their livelihood to subsistence agriculture. One of the country’s biggest exports to India is hydroelectricity, which makes up one-third of total exports. Apart from that, minerals, cement, dolomite, and even cardamom are also sent to India. The economic growth is projected to remain strong in the coming years supported by hydropower construction and the commissioning of new hydropower plants, as well as by solid growth in domestic services, albeit from a low base.

Bhutanese ngultrum is pegged with the Indian rupee at parity. As most goods are imported from India, Bhutan’s prices broadly follow movements in India’s market prices. The persistent budget deficits have contributed to a buildup of public debt, and current account deficit remains sizable reflecting large imports associated with the construction of hydropower plants. Furthermore, while the Mangdechhu hydroelectric plant will start production in mid-2018, the delays of the two other key hydropower projects could limit the country’s economic growth in 2018 and 2019.

Hong Kong – Bhutan Trade

Source: Census and Statistics Department of Hong Kong

Total exports from Hong Kong to Bhutan increased by 173.7% from HK$7.6 million in 2016 to HK$20.8 million in 2017. The top three export categories to Bhutan were: (1) telecommunications and sound recording and reproducing apparatus and equipment (+396.3%), (2) essential oils and resinoids and perfume materials; toilet, polishing and cleaning preparations (+3.1%), and (3) photographic apparatus, equipment and supplies and optical goods; watches and clocks (+33.6%), which represented 89.5% of total exports to Bhutan.

Source: Census and Statistics Department of Hong Kong

ECIC Underwriting Experience

The Hong Kong Export Credit Insurance Corporation (ECIC) imposes no restrictions on covering Bhutan buyers. In the past 12 months (from July 2017 to June 2018), there was no insured business on Bhutan.

Please click here to download the charts (PDF format).

Last update: 19 July 2018

Source: Economist Intelligence Unit

Political Highlights

Papua New Guinea is a constitutional monarchy recognising Queen Elizabeth II as the head of state. The country has three levels of government - national, provincial and local. The national parliament is a 111 member unicameral legislature elected for five-year terms by universal suffrage. The prime minister is the head of government, appointed and dismissed by the head of state on the proposal of parliament. The People's National Congress (PNC) coalition secured a majority in the parliament after Peter O'Neill's was re-elected as prime minister in the 2017 election. It is expected that PNC will remain the dominant party in the governing coalition during the current parliamentary term, which is scheduled to end in 2022

Papua New Guinea is Australia’s closest neighbour, and for reasons of proximity and a shared history. The country was under Australian administration until 1975. In recent years, Australia’s influence over Papua New Guinea has diminished considerably as a result of the rise in Chinese aid flows, with a particular focus on infrastructure and concessional loans.

Papua New Guinea is a member of the Asia-Pacific Economic Cooperation (APEC) and will be hosting the APEC summit in November 2018. The country stands to benefit from being in the global spotlight including an anticipated boost to investment, tourism and trade.

Economic Trend

*Forecast
Source: Economist Intelligence Unit

Papua New Guinea is highly reliant on the resources industry. Economic growth slowed sharply in 2016 and 2017 which reflected lower energy prices and associated cost-cutting in the resources sector, drought conditions hurting agricultural production as well as a decline in government spending. It is expected that annual growth to remain subdued in 2018 as a result of a recent shut down of its natural gas processing plant after a powerful 7.5 magnitude earthquake in February 2018.

In the past 5 years, sizeable fiscal deficits have strained the domestic financial system’s ability to absorb government borrowing. Further domestic financings are constrained as some banks are reaching internal limits for holding government securities. The government increased its reliance on external market debt to address the challenge on domestic financial constraint. However, rising external debt leaves the debt burden more vulnerable to potential local currency depreciation while debt serving cost will increase further. Moody’s changed its rating outlook to negative from stable while the B2 rating was affirmed in March 2018. Standard and Poor’s also downgraded its sovereign credit ratings to 'B' from 'B+' in April 2018.

Hong Kong – Papua New Guinea Trade

Source: Census and Statistics Department of Hong Kong

Total exports from Hong Kong to Papua New Guinea decreased by 22.4% from HK$295 million in 2016 to HK$229 million in 2017. The top three export categories to Papua New Guinea were: (1) telecommunications and sound recording and reproducing apparatus and equipment (-39.6%), (2) beverages (-1.2%), and (3) electrical machinery, apparatus and appliances, and electrical parts thereof (+225.5%), which represented 70.1% of total exports to Papua New Guinea.

Source: Census and Statistics Department of Hong Kong

ECIC Underwriting Experience

The Hong Kong Export Credit Insurance Corporation (ECIC) imposes no restrictions on covering Papua New Guinea buyers. In the past 12 months (from July 2017 to June 2018), there was no insured business on Papua New Guinea.

Please click here to download the charts (PDF format).

Last update: 17 July 2018 

Source: Economist Intelligence Unit

Political Highlights

Bolivia is a landlocked state in South America. The president is both the Head of State and the Head of Government. Juan Evo Morales, the country’s first president of indigenous origin elected in 2005, was re-elected for the third term in 2014. The governing Movimiento al Socialismo (MAS) party holds more than two-thirds majority in Congress and has a widespread presence throughout the country.

The country’s political environment has been relatively unstable in recent time as Morales is to run for the elections in October 2019, seeking his fourth term in office. While the country’s constitution only allows two consecutive terms in office, the constitutional tribunal has ruled his first term in office does not count since he did not complete the full five-year term. In November 2017,the country’s constitutional court rescinded the presidential term limits on re-election on the ground of violation of human rights which annulled the result of a referendum held in 2016, and allows Morales to stand in the 2019 presidential election. The court ruling as a result triggered a long-running strike and mass protests across the country.

Bolivia strengthened its strategic partnership with China, and the two countries signed several agreements in June 2018 including the opening up of markets as well as a memorandum of cooperation under the framework of Belt and Road Initiative.

Economic Trend

* Estimate ^ Forecast # Actual
Source: International Monetary Fund

Sources: The World Factbook, World Trade Organization

Political Highlights 

Maldives is comprised of about 1,200 islands on the Indian Ocean. The country is a presidential representative democratic republic where the president is both head of government and head of state. The current president is Abdullah Yameen elected in 2013 and the next presidential election is due in September 2018. The country has been in turmoil since Yameen ordered a state of emergency in February 2018 and jailed opponents across the legislative and judiciary. The government is facing mounting international pressure especially from the US and the European Union (EU). In July 2018, the EU approved targeted sanctions on Maldives government officials.

The country and its neighbor, India, were previously in close relationship with strategic, economic and military cooperation. However, the Indo-Maldives relationship has been shaken with China’s presence in recent years. The Maldives government made amendments to Maldivian Constitution in July 2015 that allows foreigners to own land in perpetuity, provided that the project investment is over USD1 billion and 70% of the project site is on reclaimed land.  With increasing in foreign investment projects, the country debt level continued to rise in recent years. Opponents to the government criticized the policy which resulted in high level of government debts.

Economic Trend

*Estimate
Source: Economist Intelligence Unit

Maldives is a small geographically dispersed archipelago island nation with limited natural resources. It is mainly reliant on tourism and fishing. Tourism is the largest economic sector accounted for nearly 40% of total GDP and employed 16% of total workforce in 2017. The country’s high-end tourism has propelled the economy’s strong expansion over recent decades and helped the country gaining the middle-income status. Reliance on tourism makes GDP growth volatile. While the sector has competed effectively in the past, it is subject to the vagaries of nature, as well as fluctuations in tourist arrivals. The GDP growth improved in 2017 on the back of a recovery in tourism and emphasis on infrastructure development. However, the country continues to face large and growing fiscal and external imbalances. The country’s major challenge is to manage its surge in infrastructure investment which led to high and rising government debts.

The country’s gross international reserves stood at US$788.8 million at the end of April 2018, representing a growth of 59% and 9% in annual and monthly terms, respectively. However, the foreign-reserve buffers remained low against the high government debts resulted from the government’s infrastructure push. The ongoing mega projects include the China-Maldives Friendship Bridge, 25-storey Dharumavantha Hospital, expansion of Velana International Airport and the development of Hulhumale’ phase II. The country's infrastructure capacity to accommodate tourist arrivals will increase significantly in the coming years, but the perception of the Maldives' stability may have been damaged by precautionary travel advisories issued by the governments of several key markets after its announcement of state of emergency. Separately, the country maintains a credit rating of B2 and B+ by Moody’s and Fitch respectively, both with stable rating outlooks.

Hong Kong – Maldives Trade

Source: Census and Statistics Department of Hong Kong

Total exports from Hong Kong to Maldives increased by 1.2% from HK$112 million in 2016 to HK$113 million in 2017. The top three export categories to Maldives were: (1) telecommunications and sound recording and reproducing apparatus and equipment (-21.4%), (2) other transport equipment (+750.3%), and (3) electrical machinery, apparatus & appliances and electrical parts thereof (+13.7%), which represented 65.0% of total exports to Maldives.

Source: Census and Statistics Department of Hong Kong

ECIC Underwriting Experience

The Hong Kong Export Credit Insurance Corporation (ECIC) imposes no restrictions on covering buyers in Maldives. In the past 12 months (from July 2017 to June 2018), the insured business from Maldives was limited and there was no claim payment or payment difficulty case reported.

Please click here to download the charts (PDF format).

Last update: 3 July 2018

Source: World Trade Organization, The World Factbook

Political Highlights

Antigua and Barbuda is comprised of two major islands, lying between Caribbean Sea and Atlantic Ocean. The country is a constitutional monarchy with an elected parliamentary. The Prime Minister is the Head of Government while the Queen, Elizabeth II, is the Head of State. Prime Minister Gaston Browne has been ruling the country since 2014 and his Antigua and Barbuda Labour Party (ABLP) remains the largest party following the March 2018 general election.

On a diplomatic front, the country maintains good relations with Venezuela. The government of Venezuela was the first responder to the crisis and sent aids to the country when it was devastated by hurricanes last year. Furthermore, Venezuela forgave 50% of Antigua and Barbuda’s US$139 million debts under the PetroCaribe oil deal, an energy cooperation agreement initiated by the Government of Venezuela to provide a preferential payment arrangement for petroleum to some Caribbean countries.

Economic Trend

* Estimates ^Forecast
Source: The International Monetary Fund (IMF)

Tourism is the largest economic sector of Antigua and Barbuda, accounting for over 60% of GDP and 40% of investments. Major tourist arrivals are from the US, Canada and Europe. The country’s economic growth slowed in 2017 as it was hit by the hurricanes.

The International Monetary Fund (IMF) in March 2018 said that the country’s economic outlook has deteriorated and noted that the government’s reluctance to implement its recommendations on liabilities reduction. Also, the repeal of personal income tax would be the ongoing fiscal challenges of the country. However, the Antigua and Barbuda government denied the IMF to publish its assessment report on the country’s economy. Gaston Browne expressed that the report is not accurate and the country is doing much better last year. Gaston Browne outlined a US$1.2 billion national budget that included a US$448 million funding shortfall which he proposed to make up partially through borrowings.

Recent data showed that the country saw strongest overall visitor arrivals by air from January to June 2018, with an overall growth of 7% as compared to 2017. In addition, as the country continues its climb to economic resilience, it started a three year port modernization project worth US$90 million in April 2018.

ECIC Underwriting Experience

The Hong Kong Export Credit Insurance Corporation (ECIC) offers coverage on Antigua and Barbuda buyers with payment terms in Irrevocable Letter of Credit (ILC). In the past 12 months (from July 2017 to June 2018), there was no insured business on Antigua and Barbuda.

Please click here to download the charts (PDF format).

Last update: 3 July 2018 

Source: Economist Intelligence Unit, World Trade Organization

Political Highlights

Myanmar has a multiparty democratic system, but substantial political power still rests with the military. The country is transitioning into a more open country following decades of military rule and isolation. The National League for Democracy (NLD) led by Aung San Suu Kyi, the figurehead of the country’s pro-democracy movement, came into power in 2016, marking a milestone in the country's path to democracy. While Aung San Suu Kyi remains constitutionally barred from the presidency, she acts as a de facto leader by taking on a newly created role of state counselor as well as some key government positions. The parliament elected U Win Myint as president in March 2018, replacing U Htin Kyaw who has resigned due to illness.

Despite significant reforms, the president’s control over military remains limited. The power over the military rests with the commander-in-chief who has complete control over Myanmar’s security and police force. Apart from the political issues stemming from the liberalization process, the government faces other major challenges. Inside the country, ethnic and religious tensions, some of which are spilling into violence between the Buddhist majority and Muslim minority, pose a threat to political stability. A peace deal with ethnic-minority armed groups (EAGs) is unlikely to be secured by either the current or next administration.

When Myanmar was under full military rule, the US and other Western governments placed sanctions on the army regime. But as the top brass began sharing power with a civilian government, most of those broad sanctions were lifted gradually in the past decade. However, relations with the West have become strained in recent time due to the government’s mistreatment of the Muslim ethnic minority Rohingya. In December 2017, the US imposed sanctions on 52 people and entities including the Myanmar general Maung Maung Soe. Also, the EU and Canada have placed sanctions on Myanmar military officials including asset freezes and ban from travelling in June 2018.

Economic Trend

*Forecast
Source: International Monetary Fund (IMF)
Fiscal year begins 1 April of year shown

Myanmar has enjoyed one of the fastest growth rates in the region after the military, which ruled for nearly 50 years, ceded power in 2011 to a civilian government that ushered in rapid reforms, including the relaxation of foreign investment rules in 2013-2014. Economic reforms include establishing a managed float of the Kyat, granting the Central Bank operational independence, liberalizing the telecommunications sector, and grating licenses to foreign banks. The reforms have paid off with the economy growing strongly in recent years. The country recorded 6.7% GDP growth in 2017 from 5.9% in 2016, driven by recovery in agriculture and especially crop production, improved manufacturing performance and services growth.

With continued structural reforms and the strengthening of foreign direct investment in a number of industries, such as telecommunications, oil and gas, and manufacturing (primarily garments), the growth prospect of the Myanmar economy remains favorable. Thanks to its membership in the ASEAN and its strategic location between China and India, the country benefits from relocation of manufacturing plants around the region in search of lower labor cost. Furthermore, the country will enforce a new Companies Law on 1 August 2018, aiming at attracting more foreign investment.

However, the country’s GDP per capita remains low. Decades of isolationist policies resulted in macroeconomic imbalances and deficient infrastructure.  As merchandise import growth will remain strong as foreign-invested infrastructure projects caused huge demand for imported capital goods and raw materials, the growing trade shortfall will further widen the current-account gap in the years ahead.

Hong Kong – Myanmar Trade

Source: Census and Statistics Department of Hong Kong

Total exports from Hong Kong to Myanmar increased by 47.4% from HK$1,532 million in 2016 to HK$2,259 million in 2017. The top three export categories to Myanmar were: (1) textile yarn, fabrics, made-up articles, and related products (+37.3%), (2) plastics in non-primary forms (+386.4%), and (3) telecommunications and sound recording and reproducing apparatus and equipment (-14.4%), which represented 54.1% of total exports to Myanmar.

Source: Census and Statistics Department of Hong Kong

ECIC Underwriting Experience

The Hong Kong Export Credit Insurance Corporation (ECIC) imposes no restrictions on covering buyers in Myanmar with the exception of those under sanctions. In the past 12 months (from June 2017 to May 2018, ECIC has no insured business on Myanmar.

Please click here to download the charts (PDF format).

Last update: 22 June 2018

Source: Economist Intelligence Unit

Political Highlights

Malaysia is a parliamentary democracy with a constitutional monarch. The Yang di-Pertuan Agong (or the King) is the Head of State. The Yang di-Pertuan Agong appoints the prime minister and, on the prime minister’s advice, the cabinet. In May 2018, the ruling party United Malays National Organisation (UMNO) has been ousted for the first time in the country’s 60-year history after an opposition alliance won a historic victory in national elections. Opposition Barisan Nasional (BN) leader, Mahathir Mohamad who was prime minister from 1981 to 2003 and now aged 92, sworn in as the country’s seventh prime minister in May 2018, winning 113 of 222 seats in the parliament's lower house. The next general election is scheduled for 2023.

Mahathir has made it a priority to cut the country’s debts. The new ruling coalition aims to fulfill 10 specific pledges within the first 100 days, including scraping the goods and services tax (GST), reintroduction of fuel subsidies, eradicate corruptions and review all mega projects awarded to foreign countries etc.

The country’s foreign policy will undergo some subtle changes under the new government. In June 2018, Mahathir announced to reinvigorate the "Look East policy" which focused on deepening ties with east Asia, especially Japan. The government will look to partner with Japanese companies to upgrade local infrastructure and for opportunities that promote the transfer of knowledge and technology between the two countries. Furthermore, Mahathir called for a review of the multilateral trade deal Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), saying smaller economies like Malaysia were at a disadvantage under the current terms.

Economic Trend

* Estimate  ^ Forecast
Source: Economist Intelligence Unit

Malaysia’s economy is highly open to international trade, with exports accounting for roughly 70% of GDP. Major exports include electrical appliances, electronic parts and components, oil and gas, palm oil and rubber. After a tumultuous 2016 in which real GDP grew at its slowest rate since 2009, the country’s economy performed strongly with growth of 5.9% in 2017, thanks to the upbeat global environment and the country’s exposure to the sustained upswing in the global tech cycle.

The new government has recently revealed that the country’s debt has ballooned to RM1.087 trillion (or 80% of GDP), substantially higher than the 50.8% of GDP claimed by the previous government. Mahathir has showed his determination to reduce the country’s indebtedness and especially to China. In mid June 2018, Mahathir has asked Japan to extend a yen credit in the form of soft loans, aiming to refinance its expensive debts. At the same time, the government planned to review infrastructure projects entered into by the previous administration with the aim of cutting its financial outlays by billions of ringgits.

Hong Kong – Malaysia Trade

Source: Census and Statistics Department of Hong Kong

Total exports from Hong Kong to Malaysia increased by 5.1% from HK$27,273 million in 2016 to HK$28,663 million in 2017. The top three export categories to Malaysia were: (1) electrical machinery, apparatus & appliances, and electrical parts thereof (+5.1%), (2) telecommunications and sound recording and reproducing apparatus and equipment (+1.3%), and (3) office machines and automatic data processing machines (-5.2%), which represented 68.2% of total exports to Malaysia.

Source: Census and Statistics Department of Hong Kong

ECIC Underwriting Experience

The Hong Kong Export Credit Insurance Corporation (HKECIC) imposes no restrictions on covering Malaysian buyers. Currently, the insured buyers in Malaysia range from small and medium sized companies to subsidiaries of foreign listed companies. For 2017, the number of credit limit applications on Malaysia decreased by 22.2%, while the amount of credit limit applications increased by 1.2%. Insured business increased by 0.8%. Major insured products were papers, electronics and chemical products, which represented 66.3% of ECIC’s insured business on Malaysia. The Corporation’s underwriting experience on Malaysia has been satisfactory, with no payment difficult or claim case reported during the past 12 months (from June 2017 to May 2018).

Please click here to download the charts (PDF format).

Last update: 13 June 2018

Source: Economist Intelligence Unit

Political Highlights

Vietnam has a communist government and is one of several remaining one-party socialist states in the world today. The ruling Communist Party of Vietnam (CPV) has been in power since the end of the Vietnam war in 1975. In 2016, the CPV had chosen the incumbent general secretary Nguyen Phu Trong as the country’s top leader for a second five-year term. Official corruption remains a serious problem for the country, owing to the general lack of accountability and transparency. The country ranked 107th out of 180 countries in Transparency International's 2017 Corruption Index. The country has in recent years stepped up its fight against corruption, with several senior government officials and executives of state-owned enterprises arrested and jailed.

The country has long-standing territorial disputes with China in the South China Sea which are unlikely to be resolved in near term. However, recently both sides displayed commitments to resolve these disputes peacefully through dialogue. Defense relations between Vietnam and the U.S. have strengthened since 2016, when President Obama decided to lift the ban on the sale of assault weapons to Vietnam. The economic, political and military co-operation between the two countries will continue to deepen.

Economic Trend

^Forecast
Source: Economist Intelligence Unit

Vietnam’s economic growth accelerated to 6.8% year-on-year in 2017, topping a 6.2% expansion in 2016. The strong growth was driven by higher domestic demand, strong export growth and the government's economic reforms. Strong foreign direct investments in manufacturing, combined with competitive unit labor costs relative to peers (Malaysia, Thailand, and Indonesia) and participation in free trade agreements could provide further upside to the country’s export earnings in 2018. The country reported record performance for Q1 2018 with GDP grew 7.4% on the back of a strong outturn in manufacturing, retail sales and tourism.

Recent fuel price hikes have kicked up Vietnam’s inflation in May 2018 to 3.86% year on year. Furthermore, the country is looking to increase an environmental protection duty on fuel products in July this year which could further increase inflation and hurt businesses. The country has set an inflation target of 4% for 2018.

The country is a member of the Association of South East Asian Nations (ASEAN) and Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). It has also signed trade pacts with China, South Korea, Australia and New Zealand, India, Chile and Japan, and will likely sign the EU-Vietnam Free Trade Agreement (EVFTA) with the European Union (EU) in the second half of 2018.

Hong Kong – Vietnam Trade

Source: Census and Statistics Department of Hong Kong

Total exports from Hong Kong to Vietnam increased by 10.3% from HK$72,173 million in 2016 to HK$79,632 million in 2017. The top three export categories to Vietnam were: (1) telecommunications and sound recording and reproducing apparatus and equipment (+25.6%), (2) electrical machinery, apparatus and appliances, and electrical parts (+44.1%), and (3) textile yarn, fabrics, made-up articles, and related products (+17.5%), which represented 52.2% of total exports to Vietnam.

Source: Census and Statistics Department of Hong Kong

ECIC Underwriting Experience

The Hong Kong Export Credit Insurance Corporation (ECIC) imposes no restrictions on covering Vietnamese buyers. Currently, the insured buyers in Vietnam range from small and medium sized companies to subsidiaries of foreign listed companies. For 2017, the number and the amount of credit limit applications on Vietnam decreased by 20.2% and 54.5% respectively, while insured business increased by 30.6%. Major insured products were electrical appliances, electronics and textiles, which represented 72.7% of ECIC’s insured business on Vietnam. The Corporation’s underwriting experience on Vietnam has been has been satisfactory, with no claim payment or payment difficulty case reported during the past 12 months (from June 2017 to May 2018).

Please click here to download the charts (PDF format).

Last update: 13 June 2018

Source: Economist Intelligence Unit

Political Highlights

Thailand is a constitutional monarchy while the king's formal powers are limited. Prince Maha Vajiralongkorn became the country’s new king in December 2016 after his father Bhumibol Adulyadej died in October 2016. The country’s military has a history of intervening in politics. In May 2014, the country’s military seized control of the country after a coup deposed the elected government of Yingluck Shinawatra, resulting in the country's 19th coup since the end of absolute monarchy in 1932. The head of the army, General Prayuth Chan-ocha, was named as prime minister. The country in August 2016 passed a new military-backed constitution which empowered the military to select every one of the 250 senate members and granted them a veto on decisions by elected lawmakers. The new constitution affirmed the military government's rule and has restored stability. Elections, which would be held no later than February 2019, could restore some degree of civilian rule.

The military's seizure of power in 2014 initially cooled relations with Western countries but links are gradually being restored. The US administration under the president, Donald Trump, has led a partial rapprochement between the two countries, culminating in a state visit by Prayuth in October 2017. Similarly, the European Union's Foreign Affairs Council announced in December 2017 that it would re-establish political ties with Thailand at all levels.

The government has declared economic revival to be its priority and is pursuing policies aimed at boosting consumption and investment, including ramping up public spending on infrastructure. This includes the government’s Thailand 4.0 and Eastern Economic Corridor (EEC) initiatives as well as China’s Belt and Road initiative.

Economic Trend

*Estimate ^Forecast
Source: Economist Intelligence Unit

After the military seized power in 2014, the country’s economy rebounded with growth sustained by a pick-up in exports and tourism. Economic growth accelerated to 3.9% in 2017, from 3.3 % in 2016, bolstered by favorable global economic conditions and a pickup in domestic investment. For Q1 2018, growth surged to a five-year high of 4.8% year-on-year, compared to 4.0% in previous quarter. The government has implemented a number of policies geared toward enhancing productivity and competitiveness, in part to confront structural headwinds from an ageing population. The country climbed 20 spots to 26th place in the World Bank's Ease of Doing Business rankings as a result of efforts to reduce red tape in connection with starting a business; protecting minority investors; and improving contract enforcement.

Sustained current account surpluses and higher capital inflows over the past several years have driven an appreciation of the Thai baht and facilitated the accumulation of foreign reserves to USD213 billion in May 2018 from USD156 billion in 2015, which is helping the country to shield against volatility as US rates rise. The Thai baht remains one of the best-performing currencies in the region and has continued to strengthen against the US dollar in early 2018.

Hong Kong – Thailand Trade

Source: Census and Statistics Department of Hong Kong

Total exports from Hong Kong to Thailand increased by 12.9% from HK$47,949 million in 2016 to HK$54,135 million in 2017. The top three export categories to Thailand were: (1) telecommunications and sound recording and reproducing apparatus and equipment (+26.0%), (2) electrical machinery, apparatus and appliances, and electrical parts (+13.9%), and (3) office machines and automatic data processing machines (-0.1%), which represented 60.6% of total exports to Thailand.

Source: Census and Statistics Department of Hong Kong

ECIC Underwriting Experience

The Hong Kong Export Credit Insurance Corporation (ECIC) imposes no restrictions on covering Thailand buyers. Currently, the insured buyers in Thailand are mainly small and medium-sized companies. For 2017, the number and the amount of credit limit applications on Thailand decreased by 8.3% and 52.0% respectively, while insured business increased by 16.3%. Major insured products were electronics, cameras & optical goods and furniture, which represented 31.2% of ECIC’s insured business on Thailand. The Corporation’s underwriting experience on Thailand has been satisfactory, with no claim payment or payment difficulty case reported during the past 12 months (from June 2017 to May 2018).

Please click here to download the charts (PDF format).

Last update: 12 June 2018

*Most recent data available
Source: Economist Intelligence Unit

Political Highlights

Economic Trend

*Estimate ^Forecast
Source: International Monetary Fund

Laos is one of the fastest growing economies in the region with average economic growth of 7.8% over the last decade, supported by the exploitation of natural resources, hydropower and high-speed railway construction projects led by China. However, economic growth is estimated to ease slightly to 6.8% in 2017 and 2018 partly due to slower credit expansion and fewer tourist arrivals. While the economy continues to grow, the country is set to be removed from the list of Least Developed Countries (LDCs) by the United Nations (UN) in 2024. .

Macroeconomic instability and high public debt remain a worry despite robust expansion of the country’s economy when compared to regional peers. Growth is still vulnerable and unsustainable as the resource sector remains predominant in the growth structure. Besides, the current account deficit is forecast to remain high on the back of rising imports of capital goods for infrastructure developments

Hong Kong – Laos Trade

Source: Census and Statistics Department of Hong Kong

Total exports from Hong Kong to Laos increased by 14.1% from HK$151 million in 2016 to HK$172 million in 2017. The top three export categories to Laos were: (1) textile yarn, fabrics, made-up articles and related products (+21.3%), (2) telecommunications and sound recording and reproducing apparatus and equipment (+140.5%), and (3) machinery specialized for particular industries (-7.2%), which represented 48.3% of total exports to Laos.

Source: Census and Statistics Department of Hong Kong